Deserve

Credit-building payment card innovator Deserve just closed $17 million in equity funding this week. Contributors to the round include new investor Sallie Mae, as well as existing backers Accel, Pelion, Aspect Ventures, and Mission Holdings. This brings the company’s combined debt and equity funding to $95.5 million.

The California-based company will use the funds to build out its platform and add partners to its reward programs. The company currently offers users deals with six partners, including Amazon Prime, T-Mobile, and Wikipedia.

Originally known as SelfScore, Deserve rebranded in 2017 to enhance its focus on serving college students and Generation Z. The company offers Mastercard-branded credit cards for young, financially underserved consumers and others with thin credit files. The cards are made to appeal to international students and others, such as the company’s Founder and CEO Kalpesh Kapadia, who have recently moved to the U.S. and are having difficulty accessing credit. When it came to applying for credit in the U.S., Kapadia told Business Insider, “I got rejected every time. It was mostly for credit cards and student loans, given that I didn’t have a credit card history in the country.”

Deserve has three card options: Deserve Edu, which offers student benefits such as 1% back on all purchases and a free subscription to Amazon Prime Student; Deserve Pro, which offers no foreign transaction fees and 1% to 3% back on purchases; and Deserve Classic, which is specifically designed to help users build their credit.

The company leverages non-traditional data such as current financial health, education history, future employability, and projected potential earnings. Deserve combines those factors into a machine learning algorithm to determine applicants’ credit eligibility. The company’s cards are open to U.S. citizens, green card holders, registered international students, and H1B or L1 visa holders.

Founded in 2012, Deserve demoed a consumer behavior analytics service at FinovateFall 2014 under the name SelfScore. The company’s accounts are issued by Utah-based Celtic Bank. In April, Deserve closed on $50 million in debt financing to drive growth in accounts receivables.

In rebranding his company from SelfScore to Deserve, CEO Kalpesh Kapadia explained “we believe that access is everything and everyone deserves a chance to build a positive credit history. So we are making our products available to all students, U.S., and international, and to all those who seek to build and/or maintain a good credit history.”

And now Deserve is $50 million closer to serving this broader population of potential customers. The Accel-backed fintech has just secured a $50 million debt facility from Keystone National Group to drive growth in account receivables and help “jumpstart” first-time credit owners’ financial journeys.

“Since launching the Deserve brand in October of 2017 and addressing the needs of young people who are new to credit, we’ve seen a huge response from young adults and college students across the nation,” Kapadia said. He added that the new credit facility from Keystone National Group will help his company “bring deserving consumers to the credit system who are often overlooked by the traditional approach and allow them to pave their path of financial independence.”

Making their Finovate debut as SelfScore at FinovateFall 2014, the consumer analytics company leverages machine learning and alternative data to offer a solution that the company says provides a better measure of creditworthiness than FICO scores. As Deserve, the company’s “credit scoring as a service” platform uses online profiles, phone and sensor data, psychometric questions and what the company calls “360 degree feedback” from the user’s network to give users insights and contextual information to businesses.

Deserve uses this technology in part to help millennials and Generation Z consumers establish and build credit, and earn rewards. Deserve offers consumers three Mastercard-branded credit card options:

Deserve Pro: Designed for applicants with established credit histories, Deserve Pro offers 3% cash back on travel and entertainment, 2% cash back on restaurants, and 1% cash back on purchases. Deserve Pro Mastercard also provides a credit limit up to $10,000 and a variable APR as low as 17.49%. The card is available to L1 and H1B visa holders, and has no annual fee.

Deserve Classic: Designed for applicants looking to build credit, Deserve Classic has a credit limit of $1,500, a variable APR of 24.99%, and a $39 annual fee.

The debt financing announcement from Deserve is the latest big headline from the company since it rebranded as Deserve last fall and announced $12 million in new funding. With total equity financing of $27 million, the company includes Aspect Ventures, Pelion Ventures, Mission Holdings, Alumni Venture Group, GDP Venture, and Accel among its investors. Headquartered in Menlo Park, California, Deserve was founded as SelfScore in 2013.